My 3rd generation iPod touch can set a wallpaper on the home/lock screen from my photo library, but doesn't include Apple's wallpapers.

I'm running the GM of iOS 4.

By the way, I'm pretty sure all iPod touch and iPhone models will support this after upgrading to the public iOS 4 on June 21st.

The only devices that support wallpapers are the iPhone 3GS and above and the iPod touch 3rd gen.

"Not all features are compatible with all devices. For example, multitasking, custom wallpaper, and Bluetooth keyboard support are available only with iPhone 4, iPhone 3GS, and the third-generation iPod touch (32GB and 64GB models from late 2009)."

i hear the reason is because the image background uses the multitasking technology, which is not implemented in the 2nd gen iPod Touches...

i have a 2nd gen and i jailbroke it with redsn0w and enabled multitasking,,, they were right to keep it just for the 3rd gens because it's a battery hog.. cut my daily use to about 3.5 hours, though i do like my screen at half brightness.

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The only devices that support wallpapers are the iPhone 3GS and above and the iPod touch 3rd gen.

"Not all features are compatible with all devices. For example, multitasking, custom wallpaper, and Bluetooth keyboard support are available only with iPhone 4, iPhone 3GS, and the third-generation iPod touch (32GB and 64GB models from late 2009)."

Oh, I didn't expect that. It seems like any iOS device has the power to display a simple wallpaper...

All UI transitions when entering and exiting an app are beyond laggy. Unlocking with the icons flying in is terrible aswell, not to mention if you set the lock screen and home screen to have different wallpaper. There's an animation on the wallpaper in this scenario and it's god awful.

The 2nd gen iPod Touch has less memory, slower CPU and less powerful graphics than the 3rd gen. It's not just the background image, but all of the drop shadows, etc... that rely on the better specs of the 3rd gen+ devices.

"Not all features are compatible with all devices. For example, multitasking, custom wallpaper, and Bluetooth keyboard support are available only with iPhone 4, iPhone 3GS, and the third-generation iPod touch (32GB and 64GB models from late 2009)."